Research plan for IKEA Hengelo; from a Business-to-Consumer approach towards a Business-to-Business approach.
Bachelor thesis.
Name: Ernst-Joost van Holten
Studentnumber: S1010492
Attendent: J.W.L. van Benthem.
Table of contents.
Research plan for IKEA Hengelo; from a Business-to-Consumer approach towards a
Business-to-Business approach. ... 1
1. Summary ... 4
2. Introduction. ... 5
3. Problem statement. ... 7
4. Theories and concepts. ... 8
5. Methodology. ... 16
6. The market. ... 19
7. Analysis. ... 25
8. Outcomes. ... 31
9. References. ... 33
10. Appendices ... 35
Thank you.
I would like to thank Jann van Benthem for providing feedback and guidance during this research. The meetings we had provided me often with different insights which could make this research to a success.
My special gratitude for IKEA Hengelo and in particular to Stefan Kroeze, the first Sales manager I spoke with but he got a better job within IKEA and left IKEA Hengelo while carrying out the research. Special thanks to his successor Maarten Yff who was willing to help although this research was not his decision but was a left-over of Stefan Kroeze. He was devoted help me out and along the way became more interested about this topic. Of course I’m also grateful to Tim Deputy Sales manager of IKEA Hengelo who was present when meetings with Maarten Yff took place. It was very nice to see that IKEA Hengelo provided this much attention with both the Sales manager and the deputy sales manager in the meetings.
Last but not least I’m very grateful to the housing associations that were willing to help in order to provide this research with some essential insights. Special thanks to Bert Schipper manager Wonen and Gert Bos teammanager maintenance both working for Welbions Hengelo and Herman Wanschers manager Vastgoed working for Woonbeheer Borne.
1. Summary.
This is a research for IKEA Hengelo, which is part of the multinational IKEA which provides all sort of house-related products. IKEA Hengelo seeks for a way to achieve the goals set for the coming years for the Kitchen Department. Of all possible solutions shifting towards a Business-to-Business approach is one of them. This research tries to determine the important factors when trying to shift to a Business-to-Business approach. Besides these factors a part of the B2B world is selected, the housing associations, and these factors were tested. There is also a chapter which describes the importance and relevance of this market.
First of all a literature research has been made. In several articles factors were mentioned that are important for a B2B approach. Unfortunately there were little articles about shifting from a B2C towards a B2B. These articles were read thoroughly and combined into several factors.
Besides these factors meetings were held with the sales manager and deputy sales manager in order to seek for some space left by the factors found in the literature.
The next step in this research was searching for a way to analyse these factors and find a method for researching.
After the methodology part the niche-market, housing associations, was analysed and had some very interesting outcomes. All big housing associations in the region Twente have been analysed in numbers of houses in their portfolio and a sensitivity analysis is made about their influence on the kitchen sales per day. Besides the sensitivity analysis also the SWOT, five forces and PESTEL analyses were carried out.
When the market analysis was complete I got some insights about the relevance of the market and the factors that play a leading role in a B2B perspective some housing associations were approached. Three housing associations were approached de Woonplaats in Enschede, Welbions in Hengelo and Woonbeheer Borne. Unfortunately de Woonplaats in Enschede did not respond and due the time issue I had to move on. The interviews with Welbions and Woonbeheer Borne showed some interesting insights about the importance of these factors.
Their opinions were asked about several topics and the provided me with frank opinions.
The outcomes of these interviews are point for point described in the last chapter. When IKEA Hengelo really considers to entry the B2B market these outcomes are useful for successful implementation.
Have fun reading this research!
2. Introduction.
IKEA is a major upcoming provider of kitchens and it’s appliances in the Netherlands. IKEA Netherlands has set several goals to achieve in order to gain more market share in the
Netherlands. As appendix A shows one of these goals is to achieve an average sale of 6,7 kitchens on one day for IKEA Hengelo. IKEA Hengelo is struggling with this goal. The turnover IKEA Hengelo achieved in fiscal year 2013, which started in September 2012, is 101,4% when comparing with the previous year. This was below IKEA Hengelo’s goal which was 108,0%. When looking at the goal for the kitchens in fiscal year 2013 we see the same.
Goal set was 6,5 kitchens a day and 5 appliances per kitchen. Actual sales of kitchens was 6 a day and 4,8 appliances per kitchen. It is not as bad as it sounds when we look at the averages in the Netherlands. The average turnover in the Netherlands shows a negative trend of 97,2%.
Average sold kitchens per day in the Netherlands is 8,6 with an average of 4,5 appliances per kitchen.
The goal set for fiscal year 2014 is 7,5 kitchens a day for IKEA Hengelo. This number is a lot higher than the previous goal, which hasn’t been achieved. The explanation is simple. IKEA Hengelo as extended their showroom. The showroom is almost 25% bigger than before.
Therefore the sales should rise as well. (Kamstra, Keuken doelstellingen, 2013)
As shown in Appendix B IKEA Hengelo has two definitions of a kitchen. The first one is formulated in such a way that a kitchen should at least have a sink and a cooktop. The second one considers every 11 cabinets as a sold kitchen. The last one is the so called IoS kitchen which is used to determine if the goals are achieved or not.
When we look at the changing market which involves IKEA Kitchens we see a negative trend. The total kitchen market is declining at a rapid tempo as shown in the table underneath provided by CBS.
(CBS, 2012)
When we look at the numbers IKEA Hengelo has provided we see the opposite. Besides the declining kitchen market the sales of housing appliances shows a negative trend over the last few years too. Revenues in this market decreased with 3,1%. (Retailreport, 2013)
This negative trend does not mean that Ikea is selling less too but to keep growing in market share they need to stay ahead of competition. Ikea shows a positive trend over the last few years. (Kamstra, Keuken doelstellingen, 2013)
To keep growing in this market it’s important for IKEA to oversee all options and continuous jump in to gaps of the market. That’s one of the reasons this research is made.
With the raising pressure of other kitchen retailers Ikea is searching for a way to create new sales and thus revenues. For instance the aggressive counter commercials with the famous words: “honey where is my allen wrench?” Therefore I was wondering why IKEA Hengelo should not approach companies in order to close the gap with the current sales and the goals set. When I approached IKEA they instantly became interested in my idea and agreed with me that this could be a very interesting idea in order to achieve the goals. The first appointments were made with Stefan Kroeze which was the Sales manager of IKEA Hengelo. When he left for a promotion elsewhere in the country Maarten Yff was announced to be the new Sales manager of IKEA Hengelo. With Maarten Yff the same topics were discussed as with Stefan Kroeze. Both were very interested in the outcomes of this research.
In the last several years more and more is criticized about the current situation in the housing sector. Housing associations are accused for not taking care of the primary core competences, providing houses for the lower classes. (Nu.nl, Blok wil corporaties aan banden leggen., 2013)
Minister Stef Blok also stated that housing associations should invest more in maintaining current houses instead of big projects involving crushing current houses and building new ones. This is also a chance for Ikea I believe. (Nu.nl, Corporaties moeten investeren in opwaardering, 2013)
IKEA Hengelo believes that they could contribute to the focus on the housing associations’
core competences only. For example when a housing association chooses for IKEA as a kitchen provider there is no need for an own warehouse anymore. Besides that it’s also a way of giving renters more options while cutting down costs when choosing a new kitchen. IKEA has a pricing system that is very transparent and therefore very easy to use for housing associations and their renters. (Hengelo, 2013)
I’m good aware of the fact that not just housing associations are interesting for IKEA in a B2B approach for the kitchen department. There are a lot of companies interesting for IKEA kitchens and if we think about all other products which Ikea is offering this could be a major gap in the market. Therefore one desirable outcome of this research is a list with factors for a Business-2-Business perspective which can be later used in order to see what factors are currently available at Ikea Hengelo and what are currently not available at IKEA Hengelo and therefore could be applied in a later stage for offering all products. After this research there is still a need for a market research in order to provide insights about which factors are currently insufficient available and which factors are currently sufficient available. The Business-to- Business factors found in different theories will be tested in a case study. This case study is in the form of interviews at housing associations. There is room left for additional factors when these housing associations assume that there should be more. This list of factors should be helpful when approaching different companies than housing associations for selling kitchens.
3. Problem statement.
IKEA Hengelo is devoted to achieve the goals set concerning the kitchen-department. In order to achieve this goal a research is necessary to investigate the opportunity of approaching companies to sell kitchens and therefore shifting from a business-to-consumer perspective towards a business-to-business perspective. This means that this is not a market research but this research has an explorative character. Is IKEA capable for entering the Business-to- Business market?
For solving this problem statement there will be searched for similar cases of a shift in or differences between business-to-consumer (B2C) towards a business-to-business (B2B) perspective. Besides looking for similar cases companies will be approached for a qualitative research. What we want to know is if and under which circumstances companies are
interested in ordering or offering kitchens from IKEA Hengelo or any other kitchen provider.
There is a need for concrete examples which show a good B2B relationship. (Storeplan., 2012)
Besides the circumstances I wish to provide IKEA Hengelo with some sort of list with aspects that need to be fulfilled in order for a company to switch to IKEA Hengelo when it comes to kitchens. It is important to know what is already a benefit for a company but it is more important to know what are currently drawbacks for a company. (Kamstra, Keuken doelstellingen, 2013)
In this problem statement several terms are used. The definitions of these terms are listed below:
Goals: In this research the word “goal” refers to a number of sales that is necessary for the upcoming year. This number is set by higher management in the IKEA organization.
(Storeplan., 2012)
Companies: In this research the word “company” refers to an organization that provides, sell, rent or provide maintenance in the housing-sector.
Business-to-Consumer (B2C): The term business-to-consumer refers to a company that provides products or services to a customer in the form of a person. (Hart, 2007)
Business-to-Business (B2B): The term business-to-business refers to a company that provides products or services to a customer in the form of another company. (Hart, 2007)
Circumstances: “The definition of a circumstance is a state that you are in, the details
surrounding a situation, or a condition that causes something to occur.” (yourdictionary.com, 2013)
In this research the word “circumstances” refers to different settings that could cause a company to get involved with Ikea or not. For instance a company is too far located from IKEA Hengelo.
Aspects: In this research the word “aspects” refers to different factors that could influence the circumstances. For instance free transport in order to solve a “distance problem.”
Benefits: In this research the word “benefits” refers to factors or aspects that are positive for a company or for IKEA Hengelo.
Drawback: In this research the word “drawback” refers to factors or aspects that are negative for a company or for IKEA Hengelo.
When regarding this problem statement the following research question is formulated:
“To what extend are factors of a Business-to-Business (B2B) perspective generalizable for IKEA Hengelo and companies concerning the housing sector and to which extend can B2B activities help IKEA Hengelo with achieving their goal for the kitchen department?”
In order to provide IKEA Hengelo with an sufficient answer some sub questions are formulated.
“How relevant is the B2B market for IKEAHengelo?”
“What factors are important for a B2B perspective?”
“What factors are important for IKEA Hengelo and companies in the housing sector?”
4. Theories and concepts.
4.1 Academic articles.
A literature review and future agenda for B2B branding: Challenges of branding in a B2B context. Sheena Leek and George Christodoulides.
“Branding in business-to-business markets has received comparatively little attention in the academic literature due to a belief that industrial buyers are unaffected by the emotional values corresponding to brands. This paper provides a critical discussion of the fragmented literature on business-to-business branding which is organized in five themes: B2B branding benefits; the role of B2B brands in the decision making process; B2B brand architecture; B2B brands as communication enablers and relationship builders; and industrial brand equity.
Drawing on the gaps and contradictions in the literature the paper concludes by proposing an agenda for future research.”
The article of Sheena Leek and George Christodoulides shows us the different aspects of branding in a B2B perspective. B2B branding benefits; the role of B2B brands in the decision making process; B2B brand architecture; B2B brands as communication are items to be considered. The main goal of this article is that B2C branding can be used in B2B in order to get more success. Differences between B2C branding and B2B branding are big. B2C is mainly based on influencing an individual or group of individuals on times when they are most likely to buy something. It’s all about excitement through identification and main drivers are taste, fashion, importance in closest environment and culture.
B2B branding has different drivers. Not the emotional aspect is most important but the logical aspect. Decision about buying are not made alone but by several persons each with their own perspectives. Aspects that are most important according to this paper when concerning B2B branding are:
- Risk reduction
- Information efficiency - Added value
(Christodoulides, 2011)
A cross industry review of B2B critical success factors. Riyad Eid, Myfanwy Trueman and Abdel Moneim Ahmed.
“Business-to-Business international internet marketing (B2B IIM) has emerged as one of the key drivers in sustaining an organisation’s competitive advantage. However, market entry and communication via the internet have affected the dynamics and traditional process in B2B commerce. Difficulties resulting from these new trends have been cited in the literature.
Research into identifying what are the critical success factors for global market entry is rare.
This research presents a comprehensive review in this field. The study identified 21 critical success factors applicable to most of the B2B IIM. These factors were classified into five categories: marketing strategy, web site, global, internal and external related factors. The significance, importance and implications for each category are discussed and then recommendations are made.”
The article of Riyad Eid, Myfanwy Trueman and Abdel Moneim Ahmed shows us critical success factors of a B2B approach on the internet. There a lot of articles about a B2B approach and e-commerce. This article is interested because of its focus on relationship between businesses and shows the weaknesses between e-commerce B2B approach and the traditional way of B2B. They found 21 factors which are related in B2B and an internet approach. Not all factors are used because of the different perspective this paper has. The factors that are selected are:
- Top management support and commitment. Both at IKEA Hengelo’s side but also at the housing associations’. When establishing an agreement it’s important to know for companies to know the other companies are to be trusted and committed.
- Setting strategic goals. Not only those for Ikea Hengelo but as well for the housing associations. What does IKEA Hengelo want to accomplish with their B2B approach?
What do the housing associations want to achieve?
- Collaboration. When collaborating and discussing issues with each other the perceived value is likely to become bigger.
- Technological infrastructure is another factor that the editors of this paper find very important. Good and fast communication is essential and is made possible when working with a good technological infrastructure.
- Internal Culture is defined by as the extent to which an organisation is adaptable to change according to the editors. This is important for IKEA but also for the housing associations.
- Trust is very important in a B2B perspective. Mayer et al. (1995) defined trust as the willingness of a party or person to be vulnerable to the actions of another party or person based on the expectation that the other will perform a particular action important to the trustee irrespective of the agility to monitor the other. (Mayer, 1995)
- Succesfull relationship is according to Furnell and Karweni critical and especially the inter-organisational relationship for B2B marketing. (Karweni, 1995)
- Customer acceptance is also very important . According to Riyad Eid et al. the b2b partners should be interested in each other’s customers.
(Riyad Eid, 2002)
Customer Value, Satisfaction, Loyalty and Switching Costs: An illusion from a business-to- business service context. Shun Yin Lam, Venkatesh Shankar, M Krishna Erramili and Bysan Murthy
“Although researchers and managers pay increasing attention to customer value, satisfaction, loyalty, and switching costs, not much is known about their interrelationships. Prior research has examined the relationships within subsets of these constructs, mainly in the business-to- consumer (B2C) environment. The authors extend prior research by developing a conceptual framework linking all of these constructs in a business-to-business (B2B) service setting. On the basis of the cognition-affect-behaviour model, the authors hypothesize that customer satisfaction mediates the relationship between customer value and customer loyalty, and that customer satisfaction and loyalty have significant reciprocal effects on each other. urthermore, the potential interaction effect of satisfaction and switching costs, and the quadratic effect of satisfaction, on loyalty are explored. The authors test the hypotheses on data obtained from a
courier service provider in a B2B context. The results support most of the hypotheses and, in particular, confirm the mediating role of customer satisfaction.”
The article of Shun Yin Lam, Venkatesh Shankar, M Krishna Erramili and Bysan Murthy shows us that the two dimensions of customer loyalty are positivily related to customer
satisfaction and switching costs. Satisfied customers appear to be willing to repeat patronizing the service provider and also to recommend the provider to other customers. The confirmation of the mediating role of customer satisfaction has an important implication to management. It suggests that for the sake of customer acquisition, it is more essential for management to monitor changes in customer satisfaction scores than customer value scores, since customer satisfaction rather than customer value directly affects the recommend dimension. This article provides us with yet a factor when shifting from a B2C perspective towards a B2B
perspective.
- Customer satisfaction (Shun Yin Lam, 2004)
Marketing-sales interface configurations in B2B firms. Wim G. Biemans, Maja Makovec Brencic and Avinash Malshe.
“As the body of knowledge on marketing-sales interface expands, there is a greater need to investigate the specific aspects of marketing–sales configurations in B2B firms. Using a qualitative methodology and interview data collected from over 100 sales and marketing professionals from the US, The Netherlands and Slovenia, this study presents a dynamic, evolutionary spectrum of four B2B marketing–sales interface configurations. These configurations are described in detail in terms of structure, communication patterns, information sharing, collaboration, and strategic outcomes. The findings show that no configuration is inherently superior. Our dynamic configuration spectrum offers managers a toolkit to evaluate their firm's marketing–sales interface in terms of current and desired positions, and contribute to their firm's market orientation and business performance.
The article of Wim G. Biemans, Maja Makovec Brencic and Avinash Malshe provide us with four different marketing strategies in a B2B perspective. “
Hidden marketing, marketing activities are performed by the CEO and/or sales director. The firm's proficiency at marketing is largely determined by the background and quality of one or a few individuals in the company.
Sales driven marketing is performed by companies that created a marketing function in response to changing market conditions and/or increased business activity. In these firms, the marketing function was typically a spin-off from the sales department, consisting of one or two individuals. These newly created marketing departments tried to initiate long-term strategic planning, but their focus remained on supporting day-to-day sales activities (e.g. by developing sales collateral).
Living apart marketing possessed distinct marketing and sales functions, staffed by individuals with marketing and sales backgrounds. In these B2B firms, marketing and saleswere both established functions, each with its own identity and well-defined job descriptions.
Marketing sales integration. possessed not only a distinct marketing function, but also an integrated marketing–sales interface. In these companies, marketing and sales existed as separate, independent functions, but they were closely related and played complimentary roles. In sharp contrast to the firms with established marketing and sales functions from the previous configuration, in B2B firms with marketing– sales integration, both functions were jointly responsible for creating marketing plans and programs. In this case Ikea Hengelo can be called a sales-driven marketer. The editors stated that when having a sales-driven
marketing focus should be on:
- Brand awareness - Brand equity
- Relationship marketing.
(Wim G. Biemans, 2008)
Relationship quality as a predictor of B2B customer loyalty. Papassapa Rauyruen and Kenneth E. Miller.
“This study aims to provide a picture of how relationship quality can influence customer loyalty in the business-to-business (B2B) context. Building on prior research, we propose relationship quality as a higher construct comprising trust, commitment, satisfaction and service quality. We believe that these dimensions of relationship quality can reasonably explain the influence of overall relationship quality on customer loyalty. In addition, this study provides more insightful explanations of the influence of relationship quality on customer loyalty through two levels of relationship quality: relationship quality with
employees of the supplier and relationship quality with the supplier itself as a whole. Aiming to fully explain the concept of customer loyalty, we follow the composite loyalty approach providing both behavioral aspects (purchase intentions) and attitudinal loyalty. We seek to address three main research issues: Does relationship quality influence both aspects of customer loyalty? If so,which relationship quality dimensions influence each of the components of customer loyalty? And which level of relationship quality (employee
level versus organizational level) has more influence on customer loyalty? This study uses the courier delivery service context in Australia and targets Australian Small to Medium
Enterprises (SMEs). We selected mail survey and online survey as the two methods of data collection, and together they received 306 usable respondents. Structural equation modeling yields insights into the influence of the dimensions and levels of relationship quality on customer loyalty. Results show that all four dimensions of relationship quality influence attitudinal loyalty, however, only satisfaction and perceived service quality influence behavioral loyalty (purchase intentions). Most remarkably, results indicate that only the organizational level of relationship quality influences customer loyalty. The employee level of relationship quality does not play a significant in influencing B2B customer loyalty in this study.”
The article of Papassapa Rauyruen and Kenneth E. Miller shows us that there are some factors that could be used as a predictor of the relationship. The factors that are important for the relationship in B2B perspective are according to the editors:
- Customer loyalty - Relationship quality - Perceived service quality - Trust
- Commitment - Satisfaction.
(P. Rauyruen, 2005)
Wat B2C kan leren van B2B marketing. Berber Hoekstra.
For B2C professionals B2B marketing is far away from them. The communication between the target groups and marketers. There is a need for a total different approach with B2B in comparison with B2C. But besides major differences a few similarities exist. In both branches the content marketing plays a central role and “giving” becomes more important than
“taking.” This article includes an interview with Ingrid Archer, founder of spotONvision. The focus in this article is mainly on knowing your customer. Not all content is important for the buyer your need to understand what your buyer wants. A factor that is therefore useful is:
- Knowing your customer.
(Hoekstra, 2013)
Content in B2B Marketing steeds belangrijker, Frank Watching.
“We want to go on twitter too! We have to do something with the social media. Just some quotations that customers often give me. But why? They say the competition is doing it as well. But B2B marketing can be more than just social media. It is more about the content now a days. Your target group gets more and more power. They decide what to read and what not to read.” Frank Watching’s article provides us with the introduction of a new factor. He claims content marketing is the key in a B2B perspective. What is content marketing? Content marketing is all about making sure that when customers seek for information about a specific product they’ll find your website/email/brochure etc. How does content marketing work?
First you have to decide your target group and make a buyer persona to find out where your target group is and what kind of information it seeks. Second make a need-schedule therefore further investigation about the interests of your target group is necessary. Third scan your possibilities of content marketing. Make sure some articles are placed in magazines about your product which your target group is reading or use video’s and whitepaper for instance.
The content does not have to include your product or service but needs a good story. It needs to fit to what your buyer is seeking. Your story needs to be consistent or else you won’t be credible. Then approach your target group. They should have read about specific topics and now you introduce your product.
(Watching, 2010)
Strategic Entrepreneurship, Philip A. Wickham.
Strategic entrepreneurship is a book written by Philip A. Wickham. In this book several theories and ideas are explained one of these theories is the so called SWOT analysis. This analysis will be used in the chapter which describes the relevance of the market. The SWOT analysis contains two parts. The first parts describes the Strengths and Weaknesses. The second part describes the Opportunities and Threats. Strengths that could be considered are a good product, good qualitity, a good price etc. Opportunities are for instance shifts in market orientation of customers, more suppliers in the future on the market, high educated
environment for future headhunting. The strengths and weaknesses are more focussed on what does a company good or wrong at this moment. The opportunities and threats are future oriented and show what things could make things change for a company. The entire analysis is made on a micro level. This means that it is just concerning the nearest environment of a company. For instance just Hengelo alone.
Five forces analysis, Michael Porter.
The five forces analysis made by Porter describes the market on a meso level. In this analysis five different factors are distinguished. These factors are:
1. Entry of new competition.
2. Threat for substitutes.
3. Bargaining power of buyers.
4. Bargaining power of suppliers.
5. Rivalry among existing players.
These five factors all describe powers that exist in the close environment of the industry where a company is located. It is used to describe the attractiveness of an industry.
(forces., 2012)
Strategic Entrepreneurship, Philip A. Wickham.
This book has been mentioned before. Then the SWOT analysis was mentioned but that isn´t the only theory that useful is for this research out of this book. The PESTEL Analysis is also an interesting theory. The PESTEL analysis is designed to provide managers with an
analytical tool to identify different macro level environmental factors that may affect business-strategies. It is important to monitor because these factors influence the business- strategies now but also in the future. There are in total six different factors in this analysis which should be taken in to account.
1. Politics 2. Economical.
3. Social.
4. Technological.
5. Ecological.
6. Legal.
4.2 Factors.
These theories give all their insights to the differences between B2C and B2B but they also show the importance of the differences. Major differences are for instance the volume per sale is bigger when B2B than B2C and there are less buyers. (Hoekstra, 2013) When reading all the articles there are several factors to mention. These factors have already been mentioned in the previous paragraph. The factors that will be used in this paper are:
1. Commitment and trust.
The first factor is a very important factor. Commitment is the state of being bound emotionally or intellectually to a course of action or to another person or persons. (P.
Rauyruen, 2005) Trust is believing that the other one will act as you predicted in an emotionally and intellectual way. (Mayer, 1995) For companies it’s very important to know that your partner is reliable and that they won’t decide the other day to break all contact with you. Positive aspects of commitment and trust are for instance a lot of good references, “a good name”, showing their enthusiasm and so on. Negative aspects are for instance having “a bad name”. This factor is provided by the article of P. Rauyruen which emphasized the importance of commitment and trust..
2. Loyalty and relationship.
Beside the commitment and trust factor this is a factor in the same scope. Loyalty is very important. Loyalty means A feeling or attitude of devoted attachment andaffection.
Relationship means a particular type of connection existing between people related to or having dealings with each other. This factor differs from the previous factor because this is more related to when you already arranged a deal and are already working with each other while the previous factor is more related to the pre-working phase. This factor is important because the buyer needs to be sure of his purchases because he has also to deal with his customers. For instance when Ikea is looking for a housing association to buy kitchens the housing association needs to be sure that Ikea can deliver and that things work well. Otherwise his customers, the renters, will complain. Aspects that can positive influence the loyalty is providing good solutions when problems occur, put your best efforts in maintaining a customer by providing lots of service aspects. Price is not so much an issue in a B2B perspective as it is in a B2C perspective. (Christodoulides, 2011) Aspects that can negatively affect loyalty and relationship is for instance deteriorate contacts, providing little service and lacking in distinctive power.
3. Collaboration.
To work together, especially in a joint intellectual effort. (Riyad Eid, 2002)
Most of the articles introduce collaboration as a leading factor in a successful B2B perspective. The idea is that, to stay in the same example, if a housing association knows some ways to solve a problem he can work together with Ikea Hengelo to improve the product. But it works the other way around as well, if IKEA Hengelo thinks something could be more efficient or effective at the housing association they could discuss and try to improve as well. The willingness to cooperate is usually a great issue when having a B2B perspective and for selecting companies
4. Branding.
The American Marketing Association (AMA) defines a brand as a "name, term, sign, symbol or design, or a combination of them intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of other sellers. (AMA, 2013) Branding in a B2B perspective is different than in a B2C perspective. When having
a B2C perspective brands can be used to in dentate at snapshots of buying-willingness of customers. In a B2B perspective it’s important that a lot of people are aware of the brand, know what the brand contains and that it’s an added value for their customers because decisions to buy or not to buy are not made by one single person. (Christodoulides, 2011)
5. Marketing and information
Marketing is the process of communicating the value of a product or service to customers, for the purpose of selling the product or service. It is a critical business function for
attracting customers. Marketing and information gathering but also sharing is an important factor. Content marketing is a method which is gaining more and more share in a B2B perspective. (Watching, 2010) Content marketing is a method which uses information about the buyers in order to make sure they buy your product. As Frank Watching said: "if you want to catch some fish you don’t use chocolate.” Use that information that is useful for your buyers, that information that solves their problem. When you have a lot of
information about the buyers it’s more easy to use content marketing. Marketing in a B2B perspective differs from B2C because the number of buyers is a lot smaller, the revenues per order are a lot higher and there are several persons who decide to buy or not to buy.
In this paper these factors will be used in order to show what is important in a B2B
perspective. Later on in this paper these factors will be tested if they are applicable for Ikea when considering approaching housing associations.
Besides these theoretical factors an interview has been done in order to find out if these factors could be extended by assumptions made by Ikea Hengelo. This interview is described in chapter 5.
4.3 Integration of factors.
When looking at the five different factors something stands out. According to the article of Riyad Eid et al. there are some factors connected with each other. When looking at the relationship between these factors two groups could be formed. The first group consists of commitment and trust, loyalty and relationship and collaboration which can be seen as the service aspect of a B2B perspective. These three factors influence each other in both ways.
You can imagine that if there is a lack of trust and the relationship is bad that supposedly the collaboration will be bad too. (Riyad Eid, 2002) In fact the article of Papassapa Rauyruen is partially devoted to the interaction of these three factors. “Creating a loyal B2B customer base is not only about maintaining numbers of customer overtime, but it is also about nurturing the relationship with business customers to encourage their future purchase and level of advocacy. “ (P. Rauyruen, 2005) In fact this means that if you want to have loyal B2B customers you’ll need to secure future purchases and here is where marketing kicks in.
Marketing can contribute at this level. In this way “Marketing” and “Loyalty and Commitment” are related.
On the other hand the factors branding and marketing and information are connected which can be seen as the product aspect of a B2B perspective. According to the article of W.
Biemans et al. there are multiple marketing strategies in for a B2B perspective. Ikea can be assumed as a sales-driven-marketer. This type of market strategy is characterized by creating marketing to create more sales due to changing markets. The marketing function is often a
“spin-off” of the sales department. These two characteristics are present at Ikea Hengelo (Kamstra, IKEA Keukens, 2013)With this type of marketing strategy communicating and providing services is very important. This is the information part of the factor “marketing and information.” (Wim G. Biemans, 2008)
“A brand is a cluster of functional and emotional benefits that extend a unique and welcomed Promise.” (Christodoulides, 2011) In this case branding can contributing to marketing and information. “More recent research acknowledges that despite the differences between B2C and B2B contexts (e.g. fewer and larger buyers in B2B markets) both B2C and B2B brands need to engender trust and develop both cognitive and affective ties with
stakeholders.” (Christodoulides, 2011) Stakeholders are does who are positively influenced or negatively by those actions of, in this case, a company. (Wickham, 2006) These persons can also influence decision. For instance when approaching housing corporations in order to provide them with kitchens one of the most important stakeholders are those that rent the houses. If they see the advantages of having a specific kitchen provider than this could influence the housing corporation decision in selecting their kitchen provider. This connects the branding part with the marketing part. (Hart, 2007)
5. Methodology.
5.1 Method.
The distinction between quantitative and qualitative data in social research is essentially the distinction between numerical and non-numerical data. (Babbie, 2011)
It is not intended to say something about all IKEA stores in the Netherlands or worldwide. To provide for such outcomes several IKEA stores should be working on a similar research and combine data in order to say something for all IKEA stores. Therefore this research is a qualitative research. This qualitative research has an exploring character. Not much information is yet known at IKEA about this specific topic. The research question in this research is:
“To what extend are factors of a Business-to-Business (B2B) perspective generalizable for Ikea Hengelo and companies concerning the housing sector and to which extend can B2B activities help IKEA Hengelo with achieving their goal for the kitchen department?”
This shows an empirical character due to the fact that it’s based on observations. Observations like standard B2B factors and the factors which influence the relationship between companies and IKEA Hengelo for instance. Another important thing to know is that this research is not a market research but a research to find out if IKEA Hengelo is at least able to enter the B2B market according to the factors which are provided by literature.
This research contains several different stages. First of all we need to see how relevant the market is for Ikea. IKEA Hengelo knows they have lots to win in the business-to-business (B2B) market but do the benefits make up for the drawbacks? Answers will be provided by an internet research and existing knowledge of Ikea to total kitchen market.
Second of all we need to know what factors give positive influence to a B2B approach. This will be done through researching several academic articles which provides us with a list of factors which are relevant for a B2B approach. Scientific databases like Scopus, Web of Science, Google Scholar and the library of University of Twente will be used in order to find these articles. The following search terms are used:
- Business to business factors - B2C to B2B
- B2B aspects in organizations - From B2C to B2B
- Differences B2C B2B
The theoretical factors are extended with an interview with Michel Kamstra which is the kitchen department manager of IKEA Hengelo. This interview is made in order to find out which factors are important according to IKEA Hengelo. Besides these factors there will be asked for positive aspects of working with IKEA Hengelo for a housing association and possible drawbacks.
Last but definitely not least is implementing this list of factors and positive aspects and drawbacks to the real world. A case-study will be used in order to see if the list of factors are applicable for Ikea in order to approach housing associations. A case study focusses on a single instance of some social phenomenon, such as a village, a family, a juvenile gang or a housing association. (Babbie, 2011) Several housing associations are approached in order to find out if these factors are applicable and what factors and aspects are missing in the list. I wished to approach at least three housing associations. Suggestions were Welbions in Hengelo, de Woonplaats in Enschede and Woonbeheer in Borne. Unfortunately only two respond to my request. Only Welbions in Hengelo and Woonbeheer in Borne responded.
These housing associations were interviewed with an open-ended questionnaire. These questionnaires, when possible, were recorded. After having interviewed the housing
associations these questionnaires are written in words exactly and all lines are numbered in order to refer to certain parts of the interview.
The factors that will be tested in the interviews with housing associations are:
1.Commitment and trust.
2.Loyalty and relationships.
3.Collaboration.
4.Branding.
5.Marketing.
These factors need different ways of measuring. Definitions of these factors have already been given in chapter 3. These factors will be included in the interviews and the “likert-scale”
will be applied. (Babbie, 2011)
The likert scale can provide us with some insights to what extend the companies think these factors are important. Besides the factors found in the literature there is a good chance that there are some factors not mentioned. Therefore open questions will be used in order to find out what factors are missing. This gives this research a participatory action research aspect in which the people being studied are given control over the purpose and procedure of the research according to Babby. (Babbie, 2011) Appendix C shows us the questionnaires which will be used in interviewing the companies.
Babby stated that we should think comparatively therefore three different housing
associations are selected within the region of Twente. This also provide us, in combination with different ways of observation, with another important aspect of qualitative research, obtain multiple viewpoints. These different ways of observation are done with questionnaire but also by looking how the respondent is acting and how it appears to feel like. When
someone is for instance constantly turning red in his face there could be more information that he or she is currently not willing to give.
During the interviews Steinar and Kvale identified seven stages in the complete interviewing process. These stages are:
1. Thematizing, in this stage the purpose of the interview should be clarified and
concepts-to-be-explored should be mentioned. This is already done in the introduction which includes a problem statement.
2. Designing, this stage concerns laying out the process through which you’ll accomplish your purpose. This is done in this chapter which describes how the outcome should be accomplished.
3. Interviewing, doing the actual interview. This is done at two different housing associations.
4. Transcribing, creating a written text of the interviews. As mentioned before in this chapter the complete interviews are written down on paper and every row is numbered to make it easier to refer to specific parts in the interviews.
5. Analysing, determining the meaning of gathered materials in relation to the purpose of the study. This is done in chapter 6 “Analysis”.
6. Verifying, checking the reliability and validity of the materials. This is also done in chapter 7 “Outcomes”.
7. Reporting, tell others what your findings are. The findings are reported in the chapter Outcomes.
(Babbie, 2011)
As shown this stages are not only for a complete interview but also identify the different stages in this report.
5.2 Summary methodology.
This paragraph is a short summary of actions that were taken in order to achieve a list with factors that are necessary for a B2B perspective for IKEA Hengelo and to find out if their expectations about benefits and drawbacks for housing associations when selecting IKEA Hengelo as their new kitchen provider are right.
First there is made an impression of the market and their volume added by the outcomes of the interviews.
Second a literature research is done for searching for theoretical factors. These factors are tested in the interviews.
Third IKEA Hengelo is approached in order to find out how they think they could comply to these theoretical factors and if there are factors missing according to IKEA Hengelo.
Besides these factors there will be questions about what could be benefits and drawbacks for housing associations when selecting IKEA Hengelo as their kitchen provider.
Fourth housing associations will be approached in order to test these theoretical factors and if there are factors missing. Then the assumptions which are made by IKEA Hengelo about possible benefits and drawbacks are tested at the housing association.
After these interviews there should be a good view of what factors which play a role in a B2B perspective and the different benefits and drawbacks for housing associations when selecting IKEA Hengelo as their kitchen supplier.
6. The market.
6.1 Introduction.
This paper is not so much a market research but more a research in order to investigate what differences and what similarities there are for shifting from a B2C approach to a B2B
approach. However it is interesting to see the relevance of the market. When regarding IKEA Hengelo first a SWOT analysis is made followed by a five-forces analysis and a PESTEL analysis. These analyses are briefly discussed in the next paragraph. (Wickham, 2006) A further market research is necessary to provide with more insights before entering the market of B2B.
When reading the next paragraph some assumptions are essential to know. The micro environment is just Twente and the meso environment is Overijssel while the macro environment is the Netherlands as a whole.
6.2 Analyses
First of all a SWOT analysis is made. A SWOT analysis shows the strength and weaknesses and the opportunities and threats of a particular action on the market. It is often used by starting companies but can also be useful when a different market orientation is thought off.
The SWOT analysis is made on a micro level. This means that it’s just concerning the region IKEA Hengelo is performing in. For making this SWOT analysis the interview with Michel Kamstra has been used. Michel Kamstra is manager of the kitchen department in IKEA Hengelo. The interviews with the housing associations, which are included with this report, are also used to see if the strengths and weaknesses which the interview with Michel Kamstra provided are legit.
Strengths:
- One of the strengths IKEA Hengelo has is the cost efficient part. IKEA Kitchens are not necessarily the cheapest on the market due to the fact that constructing markets also provide kitchens with an amazingly low price but with a lot less quality. When comparing their products with similar products of the competition IKEA is the cheapest. (Kamstra, IKEA Keukens, 2013) Confirmed as a strength by the housing associations (Appendix D and E).
- Another strength is that there is no need for an own warehouse anymore for the housing associations. Due to the large store and the wish of IKEA to provide kitchens from stock. (Kamstra, IKEA Keukens, 2013) Confirmed as a strength by the housing associations, however it is not unique. (Appendix D and E).
- Clear price groups which makes it possible for renters to choose a kitchen that they like. When I visited IKEA Hengelo and looked around at the kitchen department it was clear that IKEA tries to be as transparent as possible. Every little component has his own price tag. At the door presentation prices for kitchens without appliances are given. In this way people can see how much difference there is between kitchens with the standard door and a kitchen with a specific door that they like. (Kamstra, IKEA Keukens, 2013)
- Warranty conditions are a strength as well. Due to the longterm, standard warranty conditions for the cabinets 25 years, sinks and faucets 10 years and appliances 5 years IKEA can be seen as one of the best warranty providers in the market. (IKEA.nl, 2013) Confirmed as a strength by the housing associations (Appendix D and E).
- Good location at the highway A1 gives the housing associations the possibility to use the storage IKEA Hengelo already has but is also easy for their customers.
- IKEA Hengelo does also sell additional attributes for the kitchens. For instance drawer dividers. The whole package is offered at IKEA Hengelo which makes it possible to buy a complete kitchen.
Weaknesses:
- Cabinets are not assembled yet is a big disadvantage for housing associations. This means that their fitting teams have to assemble the kitchens at location. (Kamstra, IKEA Keukens, 2013)
- Giving discount is a good mind playing game. Unfortunately IKEA does not provide this opportunity due to the fact that the wish to have transparent prices. (Hengelo, 2013)
- Brand image issues is also a weakness of IKEA Hengelo. Of course they provide long- term warranties and try to enhance their quality aspect but most people see IKEA as an low price store. (Appendix E)
Opportunities:
- Housing associations deciding to order IKEA kitchens could lead to enormous impacts of the average sale a day for IKEA Hengelo (see paragraph 5.3).
- Positive reactions from renters which results in visits to IKEA Hengelo and thus some more indirect revenues. IKEA sells more than just kitchens and therefore people could come by and shop for other items in their houses.
- Extending B2B activities and offer entire IKEA Hengelo product range can increase revenues enormous. IKEA also provides bathrooms which is needed in every house but also for furnished houses the housing associations could buy their sofa’s and dining room tables at IKEA Hengelo.
Threats:
- Critical employees leaving at IKEA Hengelo. For instance the one who has contact with the housing assocations.
- IKEA Netherlands forcing IKEA Hengelo to quit with B2B activities. IKEA is not yet a B2B player and therefore IKEA Hengelo could be obliged to cancel any activity from upper hand.
The 5-forces analysis is a model provided by Michael Porter. This model shows the forces that play a leading rol in determining the profit expectations for a particular market. Instead of the SWOT analysis this is more on a meso level which concerns in this case Overijssel. These five forces are:
1. Power of suppliers. IKEA has a big network of suppliers and distributors. For IKEA
worldwide IKEA Hengelo is just a small spot on a bigger plot. This does not mean everything is right all the time. Sometimes there are some delivery issues. (Hengelo, 2013)
Besides the “normal” delivery issues IKEA Hengelo needs to make sure that the possible new kitchen sales to for instance housing associations could be provided in the first place. Does IKEA Hengelo have the abilities to sell an additional 1000 kitchens a year? How can IKEA Hengelo assure that these kitchens will be delivered properly?
2. Power of substitutes. This power is less active when concerning IKEA Hengelo and their possible B2B perspective. Houses need kitchens. Of course you could eat outdoors every night but unfortunately not everyone is in the position of doing so. Especially the niche IKEA Hengelo is trying to approach, housing associations, should always have a kitchen.
3. Power of competition. This power is the strongest one. Who is delivering the kitchens right now? What are their benefits when comparing with IKEA Hengelo? Why are they selected?
Just some questions that need to be answered before even concerning to approach the market.
4. Power of new entries on market. There is always a possibility that when something seems to work out fine others try to benefit from it. In this case IKEA Hengelo is a new entry and
should therefore be listed in the five forces analysis made by current providers of kitchens to housing associations.
5. Power of buyers. This is also a strong power. Most companies are used to getting discount when negotiating about a new kitchen deal. IKEA Hengelo does not work that way. Instead of most other companies IKEA is volume driven which means that if something seems to be selling fine and in high volumes IKEA is able to produce bigger batches of that product which makes the cost per unit lower and the selling price could be lower too and therefore sell even more of that product. (Hengelo, 2013)
Last but not least there is the PESTEL analysis. This analysis is at a macro level, which in this case concerns the Netherlands. The PESTEL analysis consists of six factors. These factors are Politics, Environmental, Sociological, Technological, Economical and Legal.
These six factors are the most important factors to influence the industry and all in their own way.
When influencing the industry also companies are involved. It is important to know what current factors have an effect on the industry, what could change within these factors and how to exploit these changes. The factors are shortly described underneath.
1. Politics are a powerful factor in this case. Minister Stef Blok stated that housing
associations should try to maintain existing houses for instance. (Nu.nl, Corporaties moeten investeren in opwaardering, 2013) This means that old houses should not be crushed but that these should be renovated. Because most of these old houses are not very expensive for renters the housing associations will try to make these renovations as cost efficient as
possible. This could be an important change in the industry which gives IKEA the possibility to jump in. IKEA Hengelo believes they could contribute to that. (Kamstra, IKEA Keukens, 2013)
2. Environmental IKEA Hengelo has several products which are technological created to cause less harm to the environment. For example the kitchen faucets are 30% more water saving than older faucets (IKEA.nl, 2013). Cabinets are transported in small packages which causes less transportation of “air” which causes less lorries on the road and therefore less greenhouse gasses. (IKEA.nl, 2013) Besides the cabinets and the faucets IKEA claims to plant new trees for every tree that is cut down, this is called the Sow and Seed project.
(IKEA.nl, 2013) The government is increasingly focussing on reduction of environmental harm. There is also a shift in the views of consumers in the Netherlands they do find it more important to cause little harm to the environment. (Flach, 2013) The replacement of single components could be seen as reduction of environmental harm because just the parts that need to be replaced are replaced instead of entire kitchens. When customer view shifts more
towards being environmental friendly and governments try to stimulate this shift IKEA could sell more and gain more market share.
3. Sociological is a factor which IKEA Netherlands could jump in to. When they fully
understand the need and lifestyle of people they can adjust their marketing and products on to it. For an housing association for instance it’s also important to know what their customers want. If they see the benefits for their customers and the enhanced living experience which it creates they have more happy renters. Hypes and trends in fashion are important to follow when offering kitchens. Popular themes and colours should be available in the price range of housing associations. The good image IKEA has obtained due to collaborations with UNICEF and Save the Children could be a reason for a company to get involved with IKEA.
When looking at the demographical part in Twente the increasingly more elderly stands out.
(CBS.nl, 2012) In the big cities Almelo, Enschede, Hengelo we see respectively 16, 15 and 17% of total population. According to the same report this numbers will keep increasing over time. IKEA should therefore think of a way to serve these customers as well. fitting service.
The increasing numbers of elderly is not an advantage for IKEA. Fitting themselves is for most elderly not an option and therefore a service like the appliance fitting service or the delivery services should be enhanced. The number of persons living in a house is also a good thing to keep in mind. For Almelo, Enschede and Hengelo the average number of persons living in a house are respectively 2,27, 2.03 and 2.21. The percentages of single-person households in comparison with all households we find that these numbers are respectively 33,9%, 44,0% and 36,1%. This is a big niche within the market. IKEA should think of a way how to serve this specific market. What is import for single-person households? How can we jump in to these needs?
4. Technological shows how important it is for a company to try to get some technological benefit. IKEA kitchens have a technological benefit. Because of the standardization of their products they offer relative cheap products with a good quality. The separate components of a kitchen is also a benefit because these can be replaced without the need of an entire new cabinet which is more cost efficient. IKEA Netherlands should look for new technological opportunities to increase the benefits their products offer and especially for kitchens. When regarding the demographical shifts this is extremely important. Try to enhance the
technological benefits in the future and make sure new benefits are created.
5. Economical is a factor of the PESTEL analysis which shows what opportunities there could be when economy is good or what threats there are when the economy turns out bad. It is used to focus on countries but in this case its focussed on the economy in the Netherlands. When economy keeps turning out bad this could be an advantage for IKEA Netherlands in order to sell more kitchens to housing associations and other companies in the housing sector. When the economy is not going well all companies seek for a way to reduce their costs. Buying kitchens from IKEA instead of the other kitchen providers could reduce their cost in multiple ways, for instance no warehouses anymore. IKEA will need to find a way in order to stay more cost efficient for housing associations. IKEA Hengelo believes this is made possible due to lower costs of kitchens but also by providing more solutions for replacement parts.
6. Legal could play a big role when government decides that every rental house should have a new kitchen in 15 years. Or when they decide to set a maximum percentage of revenues to maintenance of a company’s assets of for instance an housing association or some other company in the housing sector
6.3 Relevance of market.
The first sub-question in order to answer the research question was how relevant is the B2B market and in particular the housing sector for IKEA Hengelo? There are multiple companies to think of when having a B2B perspective as IKEA, In this paper only the relevance of the housing associations is mentioned because this is in line with the case study.
Of all households in the Netherlands about 3 million houses are rented. Approximately 75%
of those rental houses are rented by those who find it hard to find a place to live. This is the so called social rental sector. The social rental houses are only for those that earn less than 34.229 euro. (Rijksoverheid, 2013)
Housing associations provide these social rental houses and are obligated to offer at least 90%
of their houses for the social rental sector. The other 10% could be used for rental houses for people who earn more than 34.229 euro. The North-East region of the Netherlands, in which IKEA Hengelo is operating, has a total of 776500 rental houses. The part Twente in this North-East region has a total of 100.500 rental houses. (VROM, 2006) All these numbers are from a research provided by the government made in 2006.
The housing associations that are approached for the case study have the following number of houses in their portfolio:
1. De woonplaats Enschede has 17.000 houses in their portfolio. (woonplaats, 2013) 2. Welbions Hengelo has 13.000 houses in their portfolio. (Welbions, 2013)
3. Woonbeheer Borne has 2.296 houses in their portfolio. (Borne, 2011)
Besides these three housing associations there are some more that could also be interesting for IKEA Hengelo but are not included in the case study.
1. Domijn Enschede has 15.000 houses in their portfolio. (Domijn, 2013) 2. Ons Huis Enschede has 5.000 houses in their portfolio. (OnsHuis, 2013) 3. WBO Wonen in Oldenzaal has 4.000 houses in their portfolio. (WBO, 2013) 4. Beter Wonen in Alemlo has 6.400 houses in their portfolio. (BeterWonen) 5. St. Joseph Almelo has 5.500 houses in their portfolio. (StJA, 2013)
In the table is shown what impact the different housing associations could have per year.
Housing association.
Number of houses.
Average kitchen need per year.
Impact sales a day IKEA Hengelo.
Kitchens sales IoS definition.
Woonplaats 17.000 1133 3.50 1.75
Welbions 13.000 867 2.68 1.34
Woonbeheer 2.296 153 0.47 0.235
Domijn 15.000 1000 3.09 1.545
OnsHuis 5.000 333 1.03 0.515
WBO 4.000 267 0.82 0.41
BeterWonen 6.400 427 1.32 0.66
St. Joseph Almelo 5.500 367 1.13 0.565
Total 68.196 4.546 14.03 7.015
As shown in above lists there is a huge numbers of houses that are in the social sector. All of these houses need a kitchen. In most of the houses there is already a kitchen. IKEA’s
definition of a kitchen is 11 sold cabinets. (Kamstra, IKEA Keukens, 2013) Most of the social rental houses have 5 or 6 cabinets in each kitchens. Therefore the numbers of sold kitchens is divided by 2. The above calculations are made having some assumptions. One of these assumptions is that kitchens have an average life span of 15 years. (Laatjebouwen, 2013)
The mentioned housing associations have a total of 68.196 houses. Assuming that every kitchen is replaced at an age of 15 years this means that an additional average sale of 4.565 kitchens a year is realized when all of the 8 mentioned housing associations chooses IKEA Hengelo as their kitchen provider. IKEA Hengelo is opened six days a week, Monday till Saturday. Every month there is one addition, Selling Sunday. This means IKEA Hengelo is opened for 324 days a year. (IKEA.nl, 2013) When all housing associations choose IKEA Hengelo this means an additional sales of 14.09 kitchens a day. The definition of kitchens according to IKEA is 11 cabinets. (Kamstra, IKEA Keukens, 2013) Most social rental houses consists of 5 or 6 cabinets and therefore the total sales of kitchens should be divided by 2.
Besides the direct sales of the kitchens to the housing associations people get in contact with IKEA products and the chance that they go to IKEA for complementary products is a lot bigger. (Salesmanager, 2013)
6.4 Answering the question.
To give a clear answer to the question “How relevant is the market?” We can assume that this market has a lot of potential revenues and therefore is more than relevant. When looking at the goals for IKEA Hengelo all housing associations could contribute to achieving this years’
goal when acting alone. The goal set for this year is 6,5 kitchens a day and currently IKEA Hengelo sells 6 kitchens a day. The lowest kitchen/day ratio is 0,47. This are all numbers which only concerns housing associations. There are a lot more companies to be thought of.
This means that approaching companies and shifting towards a B2B perspective could indeed contribute to achieving the goals set for next year.
It’s important to keep in mind that this market, the housing associations market, is not the only market which can be thought of when approaching companies for a B2B relationship.
This is just a niche in the market which previous sales manager Stefan Kroeze and me thought could be interesting. Besides the housing associations IKEA could think of institutions which provide temporarily houses for students, sports (wo)men and or temporarily living people. Or perhaps healthcare institutions and rehabilitation clinics like TACTUS in Enschede. In other words it’s one of the many possibilities.
7. Analysis.
7.1 Introduction.
For this research some interviews are held. These interviews were taken at Welbions in Hengelo and Woonbeheer in Borne which are both housing associations. Questions were asked in order to provide this research with some answers to which extent the factors described in the literature are corresponding to reality when regarding housing associations.
Besides these factors assumptions made by IKEA Hengelo are asked in order to provide them with some information about the expectations of IKEA Hengelo and the expectations of housing associations. The questionnaires are written down word by word in appendix C for IKEA Hengelo and appendix D and E for the two housing associations. Chapter consists of 6 paragraphs. Each factor has its own paragraph and in the last paragraph the assumptions made by IKEA Hengelo are discussed.
7.2 Collaboration.
Collaboration is the extent to which companies or individuals work together to achieve a collective goal or to achieve both individual goals. (Riyad Eid, 2002) Because the article of Riyad Eid et al. does not provide with specific guidelines some guidelines are found on the internet. Suggestions made by cultuurnetwerk.nl which provide us with some key indicators for a good collaboration. (Cultuurnetwerk.nl, 2013) Some of these suggestions are: one should write their own goals and keep trying to achieve these goals. Besides own goals it’s essential that both party get some sort of benefit from the collaboration. Money alone is not the key issue in a B2B relationship. When asking about collaboration Michel Kamstra thought that the collaboration between businesses is very important in order to have a successful B2B
interaction. He thinks that this is one of the most important factors when selecting new companies for a B2B interaction. He also believes that IKEA Hengelo could not be considered as such. (Appendix C r23-29) When asking Welbions about the collaboration factor there was a clear answer. They stated that the collaboration between businesses is one of the key drivers in a successful B2B relationship and for it is for them when selecting new partners extremely important. In contrast to what Michel Kamstra believes, Welbions thinks that IKEA Hengelo could be a collaborative partner.(Appendix D R15-25) When asking Welbions for examples which show a good collaboration they believe that it is important for them that the other one does not simply do what is been asked but contributes to the services and products that they deliver. Work together in order to achieve something. (Appendix D R33-37)
Also Woonbeheer Borne think collaboration is a key factor. When asking mister Wantschers of Woonbeheer Borne about the collaboration part he stated that it is extremely important and that it is definitely used when selecting new partners. When asking about a specific example mister Wantschers said that Bribus, the current kitchen supplier, has an own showroom downstairs in their headquarters. When people need a new kitchen they simply come to Woonbeheer Borne and a sales employee of Bribus comes to explain curtain specific things about kitchens. In this way the service level towards customers of Woonbeheer Borne is absolutely great but it also provides Bribus with an opportunity to up-sell their products.
(Appendix E R5-25)
They theory already predicted that a good collaboration should be beneficial for both party and the example given by Woonbeheer Borne is a good example how such a thing could be implemented because in with this example the collaboration contributes to the service level goal that Woonbeheer Borne wants to achieve but it also contributes to the sales goal that Bribus is trying to achieve.
